Coumanios v Giunti

Federal Court of Australia|2017-06-16|Before: Perry J

The interlocutory injunction made on 12 January 2015 is vacated.
The application is dismissed.
Pursuant to rule 2.43 of the Federal Court Rules 2011 (Cth), the Court is to pay to the Second Respondent all of the sales proceeds paid into Court by the First Respondent pursuant to the orders made on 17 June 2015.
The First Respondent is released from the undertaking given by him to the Applicants which is noted at paragraph 8(i) of the orders made on 12 January 2015.
In the event that the First Respondent wishes to press for the order sought in paragraph 1 of his interlocutory application filed on 15 March 2016, the First Respondent and, if the Second Respondent wishes to be heard, the Second Respondent, are to file and serve short written submissions in support of the order on or before 4pm on 7 July 2017.
The issue of whether it is appropriate for the order referred to in paragraph 5 above to be made is to be determined on the papers.
Costs are reserved.
In the event that the parties are not agreed as to the appropriate order as to costs, the issue of costs will be determined on the papers. THE COURT NOTES THAT:
On or before 4pm on 28 June 2017, the legal representatives for the First Respondent are to advise the parties and the associate to Justice Perry as to whether the First Respondent wishes to press for the order sought in paragraph 1 of his interlocutory application filed on 15 March 2016.
The Applicants do not have any interest so as to require them to be heard on whether the order sought in paragraph 1 of the First Respondent's interlocutory application filed on 15 March 2016 is made.
On or before 4pm on 30 June 2017, the legal representatives for the Applicants are to advise the parties and the associate to Justice Perry as to whether they wish to contest an order to the effect that the Applicants are to pay the costs of the First and Second Respondents as agreed or assessed.

PERRY J: 1 INTRODUCTION [1] 2 WITNESSES [5] 3 BACKGROUND [9] 3.1 Administration of the bankruptcy and the applicants' respective statements of affairs and liabilities [9] 3.2 Discovery of additional properties in Greece [16] 3.3 The current proceedings and sale of four of the Lesbos properties [22] 4 THE ISSUES [31] 5 RELEVANT STATUTORY PROVISIONS [35] 6 DO THE APPLICANTS HAVE STANDING TO SEEK RELIEF? [41] 7 CLAIMS TO THE MONIES REALISED FROM THE SALE OF THE FOUR LESBOS PROPERTIES [60] 7.1 The applicants' submissions [60] 7.2 Were the monies property acquired after discharge from the bankruptcies? [62] 7.3 Are the applicants entitled to claim for costs and expenses in creating the fund? [69] 8 ORDERS SOUGHT BY THE FIRST RESPONDENT [77] 9 CONCLUSION [80]

INTRODUCTION 1 The applicants, Frosso Coumanios, Stanley Charles Coumanios and John Coumanios, are former bankrupts. The second respondent, Maxwell Prentice, is the trustee of the bankrupt estates of the former bankrupts (the trustee). The first respondent, Guiseppe Giunti, is a creditor in the bankrupt estates. 2 Leaving aside claims no longer pressed, by their statement of claim the applicants seek orders that the sum of $23,324.64, being the sum realised from the sale of four properties on the island of Lesbos in Greece, is the property of the applicants. They also seek a permanent stay of proceedings against Mr Giunti in Australia and Greece in order to prevent him from realising other properties located in Greece pursuant to orders made by a Greek court for the enforcement of a judgment obtained by Mr Giunti in the District Court of New South Wales against the applicants (the District Court judgment). That judgment pre-dated the bankruptcy and was accepted as a provable debt against the applicants in the bankruptcies. The properties in Greece (including those realised) have been the subject of consent orders made earlier in these proceedings declaring that, as at the date of the applicants' respective bankruptcies, the applicants' interest in the properties vested in Mr Prentice as trustee of the bankrupt estates. 3 For the reasons set out below, the applicants have not established any entitlement to relief and the application should be dismissed. Further, pursuant to r 2.43 of the Federal Court Rules 2011 (Cth), an order should be made that the Court pays to the trustee, all sales proceeds paid into Court by Mr Giunti pursuant to the orders made on 17 June 2015, as sought by the trustee in his interlocutory application filed on 16 February 2016. The applicants have no entitlement to those monies and the first respondent properly concedes that they are vested in the trustee. 4 In addition, by a so-called interlocutory application dated 14 March 2016, the first respondent relevantly seeks leave nunc pro tunc pursuant to s 58(3) of the Bankruptcy Act 1966 (Cth) (the Act) for Mr Giunti to enforce the District Court judgment. At the hearing, the first respondent indicated that he may not press for that order depending upon the outcome otherwise of the proceedings. In the circumstances, the first respondent is to advise the Court as to his position following delivery of this judgment.

WITNESSES 5 The applicants relied upon the following affidavits: (1) the affidavit of Mrs Frosso Coumanios sworn 18 December 2014; (2) the affidavit of Mr Stanley Charles Coumanios sworn 8 October 2015; and (3) the affidavit of Mr Peter Brian McKell sworn 8 October 2015; 6 These affidavits were read subject to rulings on objections. None of the deponents were cross-examined. 7 The trustee relied upon his affidavit sworn on 12 February 2016 which was read without objection, and exhibit MWP2 thereto (marked Exhibit R21). Mr Prentice was cross-examined by the applicants. 8 Finally, the affidavit of Roger Perry, an accountant who represented Mr Giunti, was tendered as an exhibit by the applicant (exhibit A4) but was not read, and was received subject to relevance. I note that the affidavit had been filed by the first respondent in compliance with orders of the Court made on 17 June 2015 requiring him to file and serve an affidavit as to his knowledge of the sale of the four properties on Lesbos. The applicants said that they tendered the affidavit otherwise than as evidence of its truth although no order was sought under s 136 of the Evidence Act 1995 (Cth) restricting the use to which the evidence might be put. The first respondent submitted that the affidavit was not relevant to the issues for determination in the proceedings. That submission appeared to be made on the assumption that the proceedings were wholly misconceived because the applicants lacked standing. However, for reasons later given, the applicants' lack of standing is an answer to some of their claims for relief but not to the entirety of the relief sought in the statement of claim. On this basis it is apparent that the evidence of Mr Perry is relevant even though the weight that can be given to it is limited in light of the fact that the affidavit was tendered as an exhibit only.

3.1 Administration of the bankruptcy and the applicants' respective statements of affairs and liabilities 9 On 13 October 2009, the then Federal Magistrates Court made sequestration orders against the applicants and appointed Mr Prentice as the trustee of each of the bankrupt estates. The date of the bankruptcies of Frosso and Stanley Coumanios was 17 December 2008 and, in the case of John Coumanios, 22 May 2009. 10 Each of the applicants lodged their statements of affairs with the trustee on 15 March 2010 which included a summary of their respective asset and liability positions. Aside from a shop located in the Parthenon in Athens (the Athens shop) said to be owned jointly by Stanley and John Coumanios, none of the applicants disclosed any properties in Greece said to be owned by them or in which they had an interest as at the date of the bankruptcy. Mr Prentice explained that he did not take action to realise the value of the Athens shop, which had an estimated value of €200,000, because 2009 was "a period [of] somewhat financial disarray in Europe" with "properties in Europe quite difficult - particularly in Greece - to sell" and the property was "somewhat in disarray". He did not consider that there was equity in the short term in realising that property. Consequently, while it was Mr Prentice's system to archive files as he had done with respect to the Coumanios files, this was not because he did not propose to take any further action. Rather there were too many files to keep them all at hand. He explained that "[w]hat happens in bankruptcy quite regularly is that you don't necessarily sell things early on in the bankruptcy. I've got assets that sometimes go back 12, 15 years that I realised." Consequently, from time to time archived files are reviewed. This bankruptcy was one where there was knowledge of a property (the Athens shop) when the files were archived but the problem was how and when it could be sold. 11 During the course of the administration of the applicants' bankrupt estates, Mr Giunti lodged a proof of debt as an unsecured creditor in the following amounts: (1) as against Frosso Coumanios - $568,141.68; (2) as against Stanley Coumanios - $663,699.35; and (3) as against John Coumanious - $647,751.67 12 The proofs of debt lodged by Mr Giunti arise from a judgment obtained by him against the applicants in the District Court of New South Wales, proceeding no. 4940 of 2007 (the District Court judgment). 13 There were insufficient assets in the bankrupt estates of each of the applicants and no distribution was paid to any unsecured creditors. 14 On or about 13 April 2013, each of the applicants was automatically discharged from the bankruptcy by operation of the Act. 15 Before the discharge of each of the applicants from bankruptcy, the trustee was not aware of any change in the applicants' asset positions and, as far as he was aware, the applicants' assets and liability positions was as reflected in their respective statements of affairs.

3.2 Discovery of additional properties in Greece 16 On 17 July 2014, the applicants' solicitors wrote to the trustee advising that a former creditor of the family had commenced legal proceedings in Greece pursuant to the judgment and requesting details of any distribution of the applicants' estates to creditors allegedly for the purpose of defending those proceedings. The letter also sought advice as to whether the trustee had ever taken steps to sell a property in Greece. The letter did not disclose to the trustee the existence of the further properties on Lesbos. 17 It was not until a telephone call on 28 July 2014 between Roger Perry, an accountant and representative of Mr Giunti, and Alan Ma, an employee of BPA Recovery (BPA) assisting Mr Prentice in relation to the applicants' bankrupt estates, that the trustee first learned of the existence of additional properties on the island of Lesbos in Greece. In that call, reference was made to the fact that Mr Perry's client (Mr Giunti) had obtained an order to pay in the Greek courts dated 2008 which was unenforceable as against the bankrupt under s 58(3) of the Act. In response to a query as to whether the bankrupt's interest in the properties in Greece were available to creditors, Mr Ma advised that "… [a]ll divisible assets, either locally within Australia or overseas, vest in the Trustee as assets of the bankrupt estate and are available for the benefit of creditors subject to realise ability and commercially viable to realise, and remain vested after discharge." Mr Ma also explained that the bankrupts were "old finalised matters in archives" and that the files were in the process of being retrieved from archives due to a recent letter from McKell's Solicitors (the bankrupts' solicitor). 18 That call was followed up by an email from Mr Perry to Mr Ma. In the email, Mr Perry stated that "[m]y client, through his Greek lawyers, has obtained a 'seizure' Order from the Greek Court. I concede that now, with the knowledge of the extant Bankruptcies that Order may need to be vacated and we are awaiting advice from our lawyers on that matter." 19 On 9 September 2014, the trustee wrote to the applicants' solicitors reminding them that the bankrupts' interest in all properties continue to vest in him as trustee and seeking information in relation to the applicants' interests in the property in Athens and the Lesbos properties. A letter in response was received from McKells on 21 October 2014 advising that the properties were on Lesbos, as to the condition of the properties, and that they were seeking more information from Greece about ownership, encumbrances and the like relating to the properties. 20 On 15 December 2014, the solicitors for Mr Giunti sent a letter by email to the applicants' solicitors referring to earlier discussions and advising that: It is clear that our client has not obtained leave to proceed in the manner that it has. However, we enclose herewith a copy of an acknowledgment by your clients to convey to our client the property in Athens. Significantly this is dated June 19 2007 well before your clients were declared bankrupt. It appears that what should occur is that there should be [a] stay on the present proceedings whilst concurrent proceedings are brought to enforce the full conveyance of the Athens property. Given that this is the nature of specific performance it seems that the District Court will not have sufficient equitable jurisdiction to permit proceedings of this nature to brought. Accordingly we will commence proceedings in the Supreme Court for an appropriate declaration and specific performance. In the meantime the stay can remain in place and our client will undertake not to take any further steps in the seizure and sale process as it relates to the Greek property. 21 On 16 December 2014 consent orders were signed in proceedings instituted by Mr Giunti against the present applicants staying the NSW District Court judgment and restraining Mr Giunti from taking any steps to enforce that judgment in Greece or otherwise. However, the District Court declined to make the orders.

3.3 The current proceedings and sale of four of the Lesbos properties 22 On 19 December 2014, the applicants commenced these proceedings seeking a number of orders as against Mr Giunti, including a stay on the enforcement of the District Court judgment, together with interlocutory injunctions. 23 On 9 January 2015, the solicitors for the trustee followed up earlier correspondence seeking advice as to whether the applicants had owned any additional assets overseas which had not yet been disclosed. With respect to these proceedings, the letter referred to the order sought by the applicants to restrain Mr Giunti from taking steps to enforce the District Court judgment, and stated that: We have no objections to the proposed orders which are sought and agree that any debt which is alleged to be owed by the Applicants to Mr Giunti pursuant to the District Court Judgment has now been extinguished as a result of the Applicants being discharged from bankruptcy on 13 April 2013. As such, Mr Giunti is now precluded from seeking to enforce the District Court Judgment in Australia or overseas. 24 Justice Dowsett made a number of orders on 12 January 2015. These included an order joining the trustee and injuncting Mr Giunti from taking any further steps to enforce the District Court judgment or otherwise execute upon it. The orders further noted that Mr Giunti undertook to the applicants, until further order of the Court, not to take any steps in the seizure and sale process as it relates to the Athens shop and to notify his Greek solicitor of these orders instructing them to withdraw the property from the sale by seizure on 28 January 2015. 25 By a letter dated 15 January 2015, Mr Giunti's Australian solicitors advised his solicitors in Greece of the Court orders made on 12 January 2015, and asked them to provide a copy of the orders to the Greek court bailiff and direct her or him to act upon them. A letter to substantially the same effect was also sent by Mr Giunti's Australian solicitors to the Public Prosecutor's Office in Athens. The solicitors for the applicants were advised of both letters by letter dated 21 January 2015 from Mr Giunti's solicitors. 26 Nonetheless on or about 14 and 21 January 2015, four of the Lesbos properties were sold without the knowledge of the trustee. The trustee was notified of the alleged sale on or about 23 February 2015 by the applicants' lawyers and received confirmation of the sales on 28 April 2015. Shortly thereafter on 6 May 2015, the trustee wrote to Mr Giunti seeking information in relation to the alleged sales, noting the trustee's interest in any proceeds as trustee, expressing concern about whether the sales had occurred in breach of the orders made by Dowsett J, and requesting that any sale proceeds be immediately remitted to the trustee. 27 On 17 June 2015, the Court made orders sought by the trustee that the sale proceeds be paid into Court and the balance of the proceeds of sale ($23,324.64) were paid into Court by Mr Giunti in accordance with those orders. 28 On 26 August 2015, the first and second respondents entered into a deed, the tenor of which is to authorise Mr Giunti to take steps to realise the Athens and other Greek properties on behalf of the trustee. Subject to any Court order or requirement that the trustee obtain the approval of the creditors of the bankrupt estates, the deed provides that the monies already paid into Court and any further monies realised by the sale of the Greek properties are to be divided equally between Mr Prentice as trustee of the bankrupt estates of the former bankrupts and Mr Giunti (bearing in mind that Mr Giunti is the most substantial creditor). An oral application for an order protecting the confidentiality of the deed was ultimately not pressed. In relation to the deed, Mr Prentice explained that "[p]ractically speaking, as a large creditor in the estate, he cooperated in the realisation of those properties, and because there was no other creditors to fund." In answer to a question in cross-examination as to whether it was his understanding that Mr Giunti was proposing to rely upon the judgment obtained by him in the Greek courts, Mr Prentice explained that "I am not aware directly that he's going to do it that, but he appears to have certain standing in these matters already, and with my cooperation, he thinks he can realise those properties a lot better than I can." In this regard Mr Prentice explained that he had taken no action himself to sell any of the properties because he was totally without funds and had never received a dollar in the administration. 29 On 22 September 2015, the trustee filed an interlocutory application and supporting affidavit seeking summary dismissal of the proceedings. That application did not proceed and on 12 November 2015, by consent of the parties the Court declared that: As at the date of bankruptcy of each of the applicants, Frosso Coumanios, Stanley Charles Coumanios and John Coumanios, being 13 October 2009, their interest, if any, in the following properties vested in the second respondent, Maxwell William Prentice, as the Trustee in Bankruptcy of each of the bankrupt estates of the applicants pursuant to section 58 of the Bankruptcy Act 1966 (Cth): … … 30 The properties then listed included the Lesbos properties, including those which had been realised, and the Athens shop. The Court also ordered by consent that there be no order as to costs as between the applicants and the trustee.

THE ISSUES 31 By the statement of claim filed on 14 December 2015, the applicants seek orders as follows: A. That the sums realised from the sale of the properties in schedule two [i.e. the four Lesbos properties already sold] are charged with or are the property of the Applicants. B. The properties in schedule 1 [including the Athens shop and the unsold Lesbos property] remain in the legal possession of the Applicants as to any entitlements, and subject to their legal rights under Greek law. C. This Second Respondent has by his inaction and in the circumstances shown an intention that he does not claim any continuing interest in the properties in schedule 1 and is otherwise estopped from acting further and in bad faith against the Applicants and third parties. D. A permanent stay of proceedings against the First Respondent both in Australia and in Greece. 32 At the hearing, the applicants pressed their claim for the orders in paragraphs A and D of the prayer for relief. Insofar as the permanent stay sought in paragraph D is concerned, the applicants explained that they sought effectively the same order as that made already by Dowsett J. 33 However, at the hearing the applicants did not press the orders sought at paragraphs B and C. In this regard it appears to have been accepted by the applicants that, in light of the trustee's present intention to take action with respect to that property as evidenced by the deed between the trustee and Mr Giunti, the claims of estoppel cannot be established. In so saying, I do not suggest that the estoppel claim might otherwise have had merit. Paragraph B of the prayer for relief related to the Athens shop and the applicants submitted that it was now subsumed within paragraph A, that is, "to stop the first respondent relying upon the …. judgment wrongfully obtained" from the Greek court. 34 A question was also raised as to whether or not the sale of the four Lesbos properties occurred in breach of the orders made by Dowsett J. The applicants argued that the Court should be entitled to come to the conclusion that the property was sold at a time when there was an extant injunction in place. Mr Giunti alleged that this was irrelevant to the issues in the case. I agree with the first respondent insofar as the substantive issues raised by the applicants are concerned. There is no pleading in the statement of claim to the effect that this was a ground on which final relief was sought by the applicants, despite oral submissions for the applicants appearing to assume otherwise. Furthermore, while the statement of claim appeared to rely upon an alleged failure to comply with the undertaking given by Mr Giunti on 12 January 2015, the pleading in the statement of claim goes no higher than to say the Lesbos properties were realised "in circumstances which the Applicants do not know and have not been explained by the First Respondent…". There is no pleading which identifies the cause of action on the basis of which it is alleged that those matters should entitle the applicants to recovery of the monies in question. Nor did counsel explain how in law those facts could give rise to such an entitlement. Rather, the alleged breach of the undertaking was not addressed orally or in writing.

RELEVANT STATUTORY PROVISIONS 35 Section 58(1) of the Act provides that: (1) Subject to this Act, where a debtor becomes a bankrupt: (a) the property of the bankrupt, not being after-acquired property, vests forthwith in the Official Trustee or, if, at the time when the debtor becomes a bankrupt, a registered trustee becomes the trustee of the estate of the bankrupt by virtue of section 156A, in that registered trustee; and (b) after-acquired property of the bankrupt vests, as soon as it is acquired by, or devolves on, the bankrupt, in the Official Trustee or, if a registered trustee is the trustee of the estate of the bankrupt, in that registered trustee. 36 "Property" is broadly defined in s 5(1) of the Act subject to a contrary intention to mean: … real or personal property of every description, whether situate in Australia or elsewhere, and includes any estate, interest or profit, whether present or future, vested or contingent, arising out of or incident to any such real or personal property. 37 "After acquired property" is defined in s 58(6) as follows: (6) In this section, after-acquired property, in relation to a bankrupt, means property that is acquired by, or devolves on, the bankrupt on or after the date of the bankruptcy, being property that is divisible amongst the creditors of the bankrupt. 38 In turn, s 116(1) of the Act provides with respect to property divisible amongst the creditors that: (1) Subject to this Act: (a) all property that belonged to, or was vested in, a bankrupt at the commencement of the bankruptcy, or has been acquired or is acquired by him or her, or has devolved or devolves on him or her, after the commencement of the bankruptcy and before his or her discharge; and (b) the capacity to exercise, and to take proceedings for exercising all such powers in, over or in respect of property as might have been exercised by the bankrupt for his or her own benefit at the commencement of the bankruptcy or at any time after the commencement of the bankruptcy and before his or her discharge; and … is property divisible amongst the creditors of the bankrupt. 39 Turning to creditors' rights, s 58(3) provides that: (3) Except as provided by this Act, after a debtor has become a bankrupt, it is not competent for a creditor: (a) to enforce any remedy against the person or the property of the bankrupt in respect of a provable debt; or (b) except with the leave of the Court and on such terms as the Court thinks fit, to commence any legal proceeding in respect of a provable debt or take any fresh step in such a proceeding. 40 Consistently with this, s 118 of the Act relevantly provides that: (6) Subject to this section, where notice in writing of the reference to the Court of a debtor's petition against a debtor is given to a creditor: (a) the creditor shall not take any action or further action, as the case may be, to attach a debt due to the debtor until the Court has dealt with the petition; and (b) if a debt due to the debtor has been attached by the creditor: (i) the creditor shall forthwith give a written notice of the presentation of the petition to the person liable to pay that debt; and (ii) the attachment of the debt is suspended until the Court has dealt with the petition.

DO THE APPLICANTS HAVE STANDING TO SEEK RELIEF? 41 The first respondent submits the applicants have no standing to bring these proceedings for two reasons, namely, that upon the making of the sequestration orders: (1) any rights that the applicants had with respect to the properties in Greece were vested in the trustee by s 58 of the Act, including the right to bring these proceedings; and (2) the applicant was divested of the properties and of any obligation to make any payments under the District Court judgment. 42 Thus Mr Hale SC for Mr Giunti submitted that: there can't be any doubt in the authorities, we would say, that there is no standing for - to have obtained the injunction in the first place, or for the applicants to maintain any claim in respect of the [properties]. As your Honour has identified, so far as the shop is concerned, it was either vested in my client prior to the sequestration order, or it was vested in the applicants in which case it became vested in the - trustee upon the bankruptcy. And that's a matter …between us [i.e. the first and second respondents]. As to the other properties, they were clearly vested in the trustee from the time of sequestration, as a consequence of which the applicant has no interest, as the authority show, in the subject matter. Now the question of whether or not the judgments that were obtained in the Greek courts… on an incorrect basis, which they appear to be… is something really for the trustee, given the trustee has the interest - the properties are vested in it.… 43 That being so, it necessarily follows in the first respondent's submission that the applicants had no interest in the monies realised from the sale of the Lesbos properties. Having regard to these matters, the first respondent submits that the proceedings must be dismissed and the interlocutory injunction lifted. The trustee agreed with the first respondent's submissions save that he submitted that they did not suffice to dispose of the whole of the proceeding. 44 For reasons set out below, I agree that the applicants' lack standing insofar as they seek relief to preserve the property of the bankrupt estates and, in particular, by the final declaratory and injunctive relief sought in the originating application and the permanent stay of proceedings in Greece sought in the statement of claim. The proceedings must therefore be dismissed to this extent. The interlocutory injunction issued against Mr Giunti by paragraph 2 of the orders made on 12 January 2015 must also be vacated and the First Respondent released from his undertaking recorded at paragraph 8(i) of those orders. The applicants had no standing in the first place to seek the interlocutory injunction restraining the first respondent from taking any steps to enforce the District Court judgment for the same reasons that they have no standing to seek final injunctive relief or a permanent stay of the Greek proceedings. 45 However, I accept the trustee's submission that this does not dispose of the whole of the issues between the parties. As counsel for the trustee submitted, it does not dispose of the proceeding insofar as the applicants maintain a claim to the monies realised from the sale of the four Lesbos properties based upon some kind of equitable charge arising from the applicants' conduct after the discharge of their bankruptcies to preserve those monies based upon the principle explained by Dixon J in Universal Distributing Co Ltd (In Liq) (1933) 48 CLR 171 (Universal Distributing). Nor does it dispose of the proceeding in so far as the applicants claim that the monies constitute property acquired after their discharge of bankruptcy which therefore never vested in the trustee. I consider these aspects of the applicants' claims later in these reasons. 46 The first respondent relied primarily upon the High Court decision in Cummings v Claremont Petroleum NL (1996) 185 CLR 124 (Cummings) in support of his submission as to the absence of an interest sufficient to establish standing to institute the proceedings and obtain relief. In that case, sequestration orders were made against the estates of Cummings and Fuller before judgment was delivered in the action against them awarding damages against them for breaches of directors' duties and other conduct. In their joint judgment, Brennan, Gaudron and McHugh JJ held that the right to appeal against a judgment that merely creates a liability in the bankrupt, lacks the character of property for the purposes of s 58(1) of the Act. That right did not therefore vest in the trustee in bankruptcy (Cummings at 133). However, their Honours held that the bankrupts nonetheless had no standing to institute the appeals because they had no financial interest in the appeal and their continent interest as bankrupts in any surplus did not suffice. In the course of so holding, the joint judgment held at 132: The Act follows the pattern of earlier bankruptcy law. Broadly, and not precisely, the effect of bankruptcy is to divest a bankrupt of his property, to vest that property in a trustee and to make it available for the payment of provable debts. The right to commence or take a fresh step in legal proceedings or to enforce any remedy against the person or the property of the bankrupt in respect of a provable debt are, in general, denied to creditors when sequestration is ordered (s 58(3)). 47 After referring to Boaler v Power [1910] 2 KB 229 and the authorities to which it referred, the joint judgment held that those authorities do not establish that a right of appeal is property but they "do establish the negative proposition that a bankrupt has no right to bring or prosecute proceedings to protect, enhance or add to the property of which he has been divested on bankruptcy" (Cummings at 135-136). In therefore rejecting the proposition that the bankrupt had standing, their Honours held at 137-138 that: So far as a judgment entered in an action against a bankrupt creates or evidences a provable debt, we respectfully agree that the bankrupt has no financial interest which would confer locus standi to appeal in his own name against the judgment. That is because it is fundamental to the law of bankruptcy that the bankrupt is divested of both his interest in his property and liability for his provable debts. Of course, a money judgment entered against a bankrupt has the effect of increasing the amount of the debts provable in his estate. But it is immaterial that, if an appeal against the judgment were successful, there would or might be a surplus in the estate after the remaining creditors are paid. A bankrupt's contingent interest in a surplus does not give him an interest which would allow him to sue to enforce proprietary rights and, that being so, it cannot give him an interest to appeal to minimise liabilities. 48 The decision in Cummings was applied in Bagshaw v Scott [2002] FCAFC 362; (2002) 126 FCR 27 (Bagshaw). In that case, the issue at first instance had been whether Mr Scott had lent money to the bankrupts secured by charges over land which, in so far as the bankrupt was concerned, had vested in equity in his trustees in bankruptcy under s 58(1) of the Act. Subsequently the trustees in bankruptcy became the registered proprietors of the land. The Full Court dismissed the appeal, holding that the bankrupt had no right to prosecute an appeal concerning the status of land vested in the trustee on bankruptcy, whether charged or not (at [32]). Nor, the Court held, did the discharge of the bankrupt from bankruptcy change the position: "[h]is trustee is still vested with the property. His indebtedness, if there is a charge, will still be satisfied from the land. If there is no charge or if the debt exceeds the charge, any indebtedness will be provable having a claim on the assets of the estate, which, if there is no charge, will include the land" (at [37]). 49 Applying Cummings and Bagshaw, the applicants plainly lack standing to bring proceedings to preserve the Greek properties against the seizure orders made in Greece because, on the making of the sequestration order, they were divested of the properties and were no longer under any obligation to make any payments under the District Court judgment. The judgment simply became evidence of a provable debt in the bankruptcy. Furthermore, I agree with counsel for Mr Giunti that, unlike the right to appeal in Cummings, the right to bring proceedings to protect the property of the bankrupt's estate against relevantly the sale by a creditor without authority, is itself property for the purposes of the Act: see the definition of "property" in s 5(1) of the Act and of property divisible among creditors in s 116(1)(b) set out at [36] and [38] above. As such that right also vested in the trustee on bankruptcy. 50 Against this the applicants submit that the statutory definition of "property" in s 5(1) of the Act so as to include real property situated in Australia "or elsewhere" does not resolve the conflicts of law questions (citing Re Doyle (1993) 41 FCR 40 (Re Doyle). Rather, in the applicants' submission, while s 58 of the Act confers authority to require a person to take such steps as are necessary to effect the realisation of land abroad, any realisation of the land must occur under lex situs, i.e. the law of the place where the land is situated (citing In re Levy's Trusts (1885) 30 Ch D 119). As a consequence, the applicants submit that: …what we draw from that is that section [58] despite its very wide terms has been construed not to create in respect to foreign immovables a right, so to speak, in rem and that there are rights, for example, for the trustee to call for a bankrupt within the jurisdiction to assign and execute documents but that the actual affectation of a foreign change of title is not what happens as a result of section 58. (see also paragraphs 25(a) and 26 of the statement of claim) 51 It follows, in the applicants' submission, that the trustee had rights in personam against the applicants, but no rights in rem and that, as a consequence, the Lesbos properties remained vested in the applicants and the money realised from the sale of the property therefore also belonged to them. As counsel for the applicants submitted: …it's clear that there are in personam rights in respect of the property in Greece. There doesn't appear to be any right to go off and do anything with that property until steps are taken in Greece. Since the remedies are in personam against the applicants, when the property changed character as a result - if we are correct - of the wrongful act of the first respondent, there remained in personam rights, potentially, but it was still our money when it changed hands because it wasn't - the rights that existed were the rights of the second respondent to call for us to do various things and that's why we had standing to commence these proceedings. 52 In my view, the applicants' submissions are flawed in a number of respects. First, the applicants' position cannot be reconciled with their consent to the declaration made on 12 November 2015 whereby they accepted that they have had no interest in the properties since the date of their respective bankruptcies by virtue of s 58 of the Act: see above at [29] - [30]. The applicants' submitted at the hearing that the consent declaration merely stated the effect of s 58 of the Act and as such did not transfer title to the trustee in bankruptcy as a matter of Greek law. However, while it is true that the declarations would not of themselves transfer legal title, the submission nonetheless fails to grapple with the fact that the consent declarations expressly recognised that the applicants' interests in the listed properties in Greece vested in the trustee on bankruptcy. 53 Secondly, no issue of private international law arises in this case. As the applicants properly accepted in argument: this Court has jurisdiction over the parties who are all present in Australia; the applicants are subject to various duties imposed upon them by the Act as a consequence of the sequestration order; the question of whether or not orders might be made with respect to the Lesbos properties that have been sold has become irrelevant given that they have been sold; the monies realised by those sales are in Australia; and this Court is applying Australian law (i.e. not a foreign law by virtue of Australian principles of private international law). 54 Thirdly, the decision in Re Doyle is distinguishable. In that case, the trustee of the deceased's estate in bankruptcy sought orders under s 120 of the Act declaring void a transfer of the deceased's interest in land in Germany to a third party. It was not in dispute in that case that the issues fell to be determined by Australian law, the first question being whether the Act was capable of application to the circumstances of the case (Re Doyle at 45). Burchett J held that, in construing the expression "settlement of property" in s 120 and considering whether the expression "property" extends to foreign immovables, the rules of private international law are relevant having regard to the principle of construction "for confining the operation of general language in a statute to a subject matter under the effective control of the Legislature" and not inconsistently with the comity of nations and established rules of international law (Re Doyle at 52-54 (quoting Dixon J in Barcelo v Electrolytic Zinc Co of Australasia Ltd (1932) 48 CLR 391 at 423-425)). Approaching the construction of s 120 having regard to that principle, his Honour held at 54 that: Whatever the effect of a sequestration order upon the immovable property of a bankrupt in a foreign country, it would be a very long step into the area under the control of that country's law for the Australian Parliament to provide that the Australian trustee in bankruptcy might avoid the title of a third party upon whom foreign land had been settled at some earlier date by a person who subsequently became bankrupt. Such a third party may have obtained a title valid under the lex situs. The rule of our private international law is that it is for the lex situs to determine the capacity of a person to deal with real estate, and the effectiveness of any conveyance… 55 Accordingly, his Honour held that "the universality which s 120 would have, if the definition of 'property' were read into it without qualification, must be limited to exclude a settlement of a foreign immovable made under foreign law" (Re Doyle at 56). A contrary construction, Burchett J held, would have been inconsistent with the principle stated in Deschamps v Miller [1908] 1 Ch 856 at 863 and British South Africa Co v Companhia de Mocambique [1893] AC 602 (Mocambique) that, absent some personal obligation owed between the parties to the suit arising from a fiduciary or other conduct or relationship, the general rule is that the Court will not adjudicate on questions relating to the title or right to immovable property outside the jurisdiction (Re Doyle at [57]). 56 By contrast, the present case does not involve any question affecting the title of a third party to a foreign immoveable. The enforcement of statutory and equitable rights and obligations between the applicants and the trustee with respect to foreign immovables are matters upon which Australian courts can adjudicate consistently with the principles identified in cases such as Re Doyle. Insofar as the applicants' title to land in Greece was concerned (and quite apart from the terms of the consent declaration), the applicants accepted that at the date of their respective bankruptcies the trustee held the right to require them to sell the land. However, that right is consistent with the applicants holding no more than the bare legal title to the land on trust for the trustee pending any transfer in title insofar as Australian law is concerned, as the trustee submitted. In this regard, the position is not relevantly different from that of the trustee in bankruptcy in Bagshaw where the Court held that the (former) bankrupt had no standing to pursue an appeal concerning the status of land vested in the trustee on bankruptcy because the bankrupt had no interest in the land. Nor did the applicants suggest that Bagshaw would have been decided differently if the former bankrupt had sought to appeal in the period between the vesting of the land in equity in the trustee on bankruptcy, on the one hand, and the subsequent registration of the trustee as the registered proprietor, on the other hand. Any such proposition would undermine the purpose of bankruptcy law, as explained in Cummings (see above at [46]). In other words, at least as a matter of Australian law and, in particular, as against the trustee, it cannot be said that the applicants had any beneficial, and therefore any financial, interest in the four Lesbos properties in question prior to their realisation which could suffice to afford them standing to seek relief to protect or preserve these properties. 57 Finally, the applicants submitted that "[a] Bankrupt has rights in the absence of the trustee to defend the bare legal title of the bankrupt and in this circumstance, discharged bankrupts to protect, in the absence of the trustee, the bare legal interest the bankrupt holds against the world other than the trustee." The applicant relies in this regard upon the decisions in Thistlethwayte v Gender Estates Pty Ltd (1976) 8 ALR 700 (Thistlethwayte) and Elali v Mahrs [2013] NSWSC 1883 (which applied Thistlethwayte) with respect to the rights of bankrupts over after acquired property. However, those authorities do not assist the applicants. They concern s 126(1) of the Act providing that a transaction by a bankrupt with a person dealing with her or him in good faith and for valuable consideration in respect of property acquired by the bankrupt during the bankruptcy is valid against the trustee if completed before intervention by the trustee. As such, s 126(1) protects the rights of innocent third parties in transactions dealing with property acquired by a bankrupt after commencement of the bankruptcy by ensuring that valid title passes to the third party. As Bowen CJ in Eq explained in Thistlethwayte at 703, s 126(1) has two aspects: "in its principal aspect it looks to the rights of the person dealing with the bankrupt. In its other aspect it looks to the acquisition of property by the bankrupt after he became bankrupt, and his capacity to transfer a title to the property." However, as Bowen CJ in Eq also explained in Thistlethwayte at 704: It seems that unless and until the official receiver intervenes, a bankrupt, whether it be correct or not to describe him as a factor or agent for the official receiver, has power to deal with after-acquired property and to bring proceedings in respect of it, notwithstanding it is vested in the official receiver. If in the course of proceedings by a bankrupt the official receiver does intervene, the bankrupt's proceedings may be brought to nothing… 58 Thus, as Lord Greene MR observed in Re Pascoe [1944] 1 Ch 219 at 228 (in a passage approved in Thistlethwayte at 703-704), "…the thing which is valid is the transaction, and to validate a transaction by an undischarged bankrupt comes nowhere near saying that the title to after-acquired property remains in the bankrupt" (emphasis added). 59 It is apparent therefore that the authorities holding that an undischarged bankrupt may maintain proceedings with respect to transactions involving after acquired property during the period of the bankruptcy turn upon the particular operation and effect of s 126 of the Act on transactions with third parties where the trustee does not intervene in the proceedings. They do not stand as authority for any broader proposition that a bankrupt or former bankrupt has standing to defend the bare legal title of property vested in the bankrupt, as the applicants submit. As such, these authorities do not advance the applicants' case as to standing.

CLAIMS TO THE MONIES REALISED FROM THE SALE OF THE FOUR LESBOS PROPERTIES

7.1 The applicants' submissions 60 With respect to paragraph A of the prayer for relief, the applicants put the claim in their written submissions in two ways, namely: 13. The monies now held in Court should either be ordered to be paid to a. the Applicants because the monies themselves are assets acquired after the end of their bankruptcy and are the proceeds of property held in Greece which at the time of sale they were the legal owners; or b. dispersed to the second respondent but subject to payment of the Applicants' costs of obtaining them from the First Respondent and compelling their payment into Court. In essence the Applicants, if they have no interest themselves, have preserved the funds for the benefit of the Trustee. The Trustee sought to be joined but has taken no action to protect or secure the funds paid in to Court itself. 61 Neither contention should be accepted for the following reasons.

7.2 Were the monies property acquired after discharge from the bankruptcies? 62 While not pleaded, at the hearing the applicants submitted that the first ground on which they seek to recover the monies paid into Court is founded on the cause of action for recovery of monies had and received. As best I can understand the argument, the applicants' submissions can be reduced to the following propositions: (1) the monies in question came into the hands of Mr Giunti by reason of his breach of s 58(3) and s 118 of the Act and therefore belonged in justice and equity to the applicants as against Mr Giunti; (2) as a result, the land sold in Lesbos changed its nature or character and was property acquired after the applicants' discharge from bankruptcy (statement of claim at [24]); (3) as such, the monies do not constitute property for the purposes of s 58(1) of the Act which captures property acquired only in the period after the commencement of bankruptcy and before discharge (referring to the definition of property in s 5(1) of the Act and s 116(1)(b)). 63 The basis of the common law action for money had and received is restitution or unjust enrichment: Australia and New Zealand Banking Group Ltd v Westpac Banking Corporation (1988) 164 CLR 662 (ANZ Banking v Westpac) at 673 (the Court). However, unjust enrichment is not itself a definitive legal principle but rather "a unifying legal concept which explains why the law recognizes, in a variety of distinct categories of case, an obligation on the part of a defendant to make fair and just restitution for a benefit derived at the expense of a plaintiff…": Pavey & Matthews (1987) 162 CLR 221 at 256-257 (approved in David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 (David Securities) at 378-379 (Mason CJ, Deane, Toohey, Gaudron and McHugh JJ)). Accordingly, the joint judgment held in David Securities at 379 that: …it is not legitimate to determine whether an enrichment is unjust by reference to some subjective evaluation of what is fair or unconscionable. Instead, recovery depends upon the existence of a qualifying or vitiating factor such as mistake, duress or illegality. As this Court stated in Westpac Banking Corporation [(1988) 164 CLR 673]: "In other words, receipt of a payment which has been made under a fundamental mistake is one of the categories of case in which the facts gave rise to a prima facie obligation to make restitution, in the sense of compensation for the benefit of unjust enrichment, to the person who has sustained the countervailing detriment." As La Forest J. stated in Air Canada v British Columbia [[1989] 1 SCR at 1201; (1989) 59 DLR (4th) at 192], the two species of mistake (i.e., fact and law) should be "considered as factors which can make an enrichment at the plaintiff's expense "unjust" or "unjustified". 64 As such, the joint judgment rejected the submission that "unjustness" must be independently proved over and above (relevantly in that case) the mistake: David Securities at 379. 65 With respect to the contentions in this case, it will be recalled that, by reason of s 118(1)(b) of the Act, the "property" which vested in the trustee on bankruptcy includes the capacity to exercise all such powers with respect to the property as the bankrupt might have exercised including to take proceedings for the purposes of exercising such powers, while s 58(3) provides that a creditor is not competent to enforce any remedy against the property of the bankrupt in respect of a provable debt. In this regard, it was not in issue that neither Mr Giunti nor his agent, Mr Perry, had authority at the time to take steps to enforce the District Court judgment in Greece. Rather, the judgment debt had become a right to prove in the applicants' bankruptcy and Mr Giunti lacked competence to enforce the judgment against the applicants or their property, including by commencing legal proceedings in Greece, save with leave of the Court under s 58(3) of the Act. 66 However, the fact that Mr Giunti lacked competency to seek to enforce the District Court judgment against the Lesbos properties does not mean that the monies realised from the sale of the properties did not vest in the trustee. Once it is accepted for the reasons earlier stated that the trustee held the beneficial interest in the Lesbos properties and the applicants no more than a bare legal title with no financial interest, there is nothing in the act of realisation which could logically give the applicants any right to the monies as against the trustee. The trustee cannot be said to have been unjustly enriched because property beneficially vested in him has been realised. Nor equally has Mr Giunti been unjustly enriched. He correctly accepted that the monies vested in the trustee on realisation of the properties. As counsel for the trustee succinctly submitted: …first, that property [the Lesbos properties] was property which had vested in the trustee pursuant to section 58. Two, money produced from the sale of property which beneficially belonged to the trustee itself belongs to the trustee. That is, it doesn't, in some chameleon-like way, change character merely because the property is now money rather than real property. It was beneficially owned by the trustee and the declaration of the court make that clear if there was any lack of certainty about it. And it's that same property now represented by its net proceeds which are the funds sitting in court. 67 Ultimately, therefore, the propositions set out above on the basis of which the applicants seek to recover the monies realised from the sales of the Lesbos properties cannot be sustained. 68 The applicants also submitted that the Court should infer that the realisation of the four Lesbos properties took place in circumstances where the bankruptcy had not been revealed and that the enforceability of the District Court judgment was the moving part of the decision-making process of the Greek court. In this regard, it can fairly be inferred from the contemporaneous documents that the proceedings were pursued in the Greek courts to enforce the NSW District Court judgment because Mr Perry was not aware of the bankruptcy, in line with the evidence contained in his affidavit. No evidence was led as to why Mr Perry was not informed about the bankruptcy by Mr Giunti although nothing suggests any bad faith on Mr Giunti's part and no such case is pleaded. Consistently with this, Mr Giunti's conduct once the issue had been raised with his agent, Mr Perry, was one of co-operation with the trustee: see further at [74(1)] below. While there was a suggestion by the applicants that it may be inferred that if Mr Giunti had given evidence, it would not have assisted his case, it is not clear how any such evidence might have assisted the applicants' case. I note in this regard that the failure to call a witness cannot fill gaps in the evidence, or convert conjecture and suspicion into inference: Schellenberg v Tunnel Holdings Pty Ltd [2000] HCA 18; (2000) 200 CLR 121 at [53] (Gleeson CJ and McHugh J); O'Donnell v Reichard [1975] VR 916 at 929.

7.3 Are the applicants entitled to claim for costs and expenses in creating the fund? 69 In the alternative, the applicants submitted that the monies realised by the sale of the properties were paid into Court due to their actions and accordingly the monies vested in the trustee subject to the preservation principle in Universal Distributing (statement of claim at [21]). 70 In Universal Distributing, the company had given a debenture purporting to create a floating charge over its assets before the company went into liquidation. The winding up order was expressed to be made without prejudice to the rights of the debenture-holder to the assets, save that the petitioning creditor's costs should be paid in priority to the debenture. The debenture-holder objected that the liquidator's remuneration and certain disbursements should not be allowed in priority to his security. In upholding the liquidator's entitlement to expenses reasonably incurred in the care, preservation and realization of the property which generated the fund for the benefit of the debenture-holder, Dixon J held at 174-5 that: If a creditor whose debt is secured over the assets of the company come in and have his rights decided in the winding up, he is entitled to be paid principal and interest out of the fund produced by the assets encumbered by his debt after the deduction of the costs, charges and expenses incidental to the realization of such assets. The security is paramount to the general costs and expenses of the liquidation, but the expenses attendant upon the realization of the fund affected by the security must be borne by it. The debenture-holders are creditors who have a specific right to the property for the purpose of paying their debts. But if it is realized in the winding up, a proceeding to which they are thus parties, the proceeds must bear the cost of the realization just as if they had begun a suit for its realization or had themselves realized it without suit… …In the present case the liquidator has employed a material part of his time and energies in recovering monies, both uncalled capital and debts, which enure for the debenture holder, and in so far as these services increase the remuneration which he receives, I see no reason why the burden should not be thrown upon the proceeds. … The question in the present case is whether the liquidator can charge against the fund passing through his hands as between himself and the person to whom it is payable, so much of the remuneration fixed for work done in the winding up as is referable to the calling in and conversion of the assets producing the fund. I see no reason why remuneration for work done for the exclusive purpose of raising the fund should not be charged upon it. (citations omitted) 71 In essence, as counsel for the trustee submitted, "…if somebody incurs expense or costs and expense to create a fund which would otherwise vest on a third party, then at least in the liquidation context… the court will require the legal owner to recognise the costs and expenses incurred by the creator of the fund… It's the unconscionable conduct of the legal owner taking advantage of the work and effort and expense which equity, in effect, requires or disallows." 72 The applicants' claim based on these principles cannot stand. 73 First, it is not in dispute that the applicants did not disclose any of the Lesbos properties. The only property which was disclosed by the bankrupts was the Athens shop. While none of the applicants gave evidence as to the circumstances in which the non-disclosure took place, there was no issue taken with the trustee's submission that it was unnecessary for any finding to be made as to whether or not the non-disclosure was deliberate. Secondly, it was through Mr Giunti's efforts that the additional properties were located. Thirdly, it was as a consequence of the trustee's efforts, as the rightful owner of the fund, to obtain information from the applicants and Mr Giunti that the monies came to be paid into Court (see above especially at [17]-[19], [23]-[24], and [26]-[27] above). As the trustee submitted, "[w]ithout these efforts, the Applicants' non-disclosure would have meant that the properties went undiscovered by the [trustee] and the fund would not have been created." As such, as the trustee submits, the applicants should not be rewarded for doing no more than was required by the Act, namely, to disclose the information to the trustee. 74 Furthermore, as the trustee also submits, the evidence does not establish that the proceedings were instituted or maintained by the applicants for the benefit of their respective estates in bankruptcy or their creditors, as is demonstrated by the following matters. (1) The originating application sought orders to injunct Mr Giunti from taking any steps to enforce the District Court judgment in Greece or otherwise, notwithstanding that Mr Giunti had earlier volunteered an undertaking to similar effect in District Court proceedings on 15 December 2014: see above at [20]-[21] Similarly, Mr Giunti consented to the order made on 12 January 2015 in these proceedings injuncting him from taking any steps in the seizure and sale process as it relates to the Athens shop and to take steps through his Greek solicitors to halt the seizure and sale process by the Greek Court bailiff (see above at [23]- [25]). It is apparent from these matters that Mr Giunti was co-operating, notwithstanding that the evidence suggests that the processes of the Greek Courts were not in fact able to be halted in time to prevent the sale of four of the Lesbos properties. Mr Giunti's co-operation and the reasons for it were expressly recognised by the trustee who had been totally without funds to administer the applicants' bankrupt estates, and that co-operation is continuing pursuant to the deed concluded by Mr Giunti and the trustee (see above at [28]). (2) The applicants did not have any beneficial interest in the properties the subject of the proceedings and recognised that their interest in properties had vested in the trustee on bankruptcy in consenting to the declaration made on 12 November 2015 (see above at [29] - [30]). (3) The statement of claim sought orders that the monies realised from the sale of the four Lesbos properties are charged with or are the property of the applicants, being orders that challenge the trustee's claims to the property and are pursued to further the applicants' personal interests. Similarly, while not ultimately pressed, the same may be said with respect to the other orders initially sought in the statement of claim, namely that: (a) the remaining properties in Greece remained in their legal possession and subject to their legal rights under Greek law; and (b) the trustee by his inaction has shown an intention that he does not claim any continuing interest in the remaining properties and is estopped from acting further against the applicants and third parties. 75 It follows, as the trustee submits, that this is not a case where, having allowed the fund to be created with knowledge of the expense being incurred for the benefit of the estates in bankruptcy, the trustee now seeks unconscionably to take advantage of that effort without compensating the creator of the fund for the costs and expense in so doing. As such, the applicants have not established the existence of any equitable charge over the monies held in Court in accordance with the principles in Universal Distributing. 76 Finally, I agree with the trustee that the applicants have not established that this is an appropriate case in any event for the grant of equitable relief in the exercise of discretion, given that they were obliged to make full disclosure of their assets wherever situated and failed to do so.

ORDERS SOUGHT BY THE FIRST RESPONDENT 77 As earlier mentioned, Mr Giunti also seeks leave nunc pro tunc pursuant to s 58(3) of the Act for him to enforce the District Court judgment. In this regard, he contends that these orders do not affect the applicants' interests but would merely regularise matters as between the first and second respondents in line with the terms of the deed providing for Mr Giunti to take steps for the benefit of the trustee. However, Mr Giunti also accepted that, if the applicants had no standing to seek injunctive relief against him in the first place, (as I have in fact found), the relief sought under s 58(3) may be unnecessary given that the trustee is not concerned as a practical matter with the irregularity in realising the Lesbos properties. Counsel for Mr Giunti further submits that "strictly speaking" the application by the first respondent is "probably something that should be done in the bankruptcy proceedings, rather than in these proceedings, but … prudence has led to the application to the extent that it is necessary". As a result, counsel for Mr Giunti indicated that, depending upon the reasons for judgment, Mr Giunti may decide not to press his application for the orders under s 58(3). As such it was decided at the hearing that, depending upon the outcome, I would afford the parties the opportunity to be heard on the orders - a proposed course with which the first respondent agreed. 78 The applicants however submitted that as the orders were made in these proceedings, they appear to be made against the applicants to regularise a position whereby money that should have gone to the applicants was affirmed as going to the first respondent. However having found that the applicants had no beneficial interest in the realised Lesbos properties as at the date of their respective bankruptcies and therefore in the monies realised by the sale of those properties, I do not consider that the applicants have any legitimate interest in the question of whether or not the orders sought by the first respondent should be made. It may well be in those circumstances that the order sought by Mr Giunti is unnecessary. In line with the intimation given at the hearing, I will therefore afford Mr Giunti the opportunity to consider whether the order is pressed. 79 Further, while Mr Giunti also sought an order in his interlocutory application for the applicants to pay the first respondent his costs of recovery of the property, no submissions were made in support of that order. In those circumstances, I do not understand that aspect of Mr Giunti's interlocutory application to be pressed.

CONCLUSION 80 For the reasons set out above, the application must be dismissed and an order made for the Court to pay the sales proceeds paid into Court by Mr Giunti to the trustee, as sought by the trustee. The first respondent is also to indicate within 14 days whether or not he wishes to press for the order sought in paragraph 1 of his interlocutory application filed on 15 March 2016. Finally, the issue of costs is reserved as requested by the applicants. However it is my preliminary view that costs should follow the event and that the applicants should therefore pay the first and second respondents' costs. In the event that the applicants wish to contend for a different outcome on the issue of costs, the parties are to be afforded the opportunity to file short written submissions with the issue to be determined on an expedited basis on the papers. I certify that the preceding eighty (80) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perry.

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